Asia's US LNG Deals Seek Tariff Relief but Raise Climate and Energy Security Risks

Trade relief could bring decades of gas commitments

Japan's largest power generator, JERA, has signed contracts lasting 20 years to buy up to 5.5 million metric tons of US liquefied natural gas annually, with deliveries starting around 2030. South Korea has agreed to purchase $100 billion in US energy products alongside a $350 billion investment commitment. Taiwan's CPC Corp. has signed a letter of intent to buy gas from, and invest in, a proposed $44 billion project in Alaska.

As of September 1, 2025, these commitments and negotiations are part of a wider push by Asian economies to ease tariff pressure from President Donald Trump's administration. Japan, South Korea, Vietnam, Taiwan, Thailand, the Philippines and India have pursued or considered greater purchases of American liquefied natural gas, known as LNG, as Washington makes fossil fuel exports a central part of trade bargaining.

The immediate attraction is relief for exporters facing steep US tariffs. The longer commitment involves fuel purchases, pipelines, import terminals and power plants that could shape energy spending for decades. Researchers warn that this could slow climate action and expose countries to expensive infrastructure, changing gas prices and uncertain supplies.

LNG is natural gas cooled into a liquid so it can be stored and transported by ship more easily. Countries use the gas to generate electricity, run industrial processes, heat homes and cook. The United States is now one of the world's largest LNG exporters, giving Washington a product that it can promote during negotiations over access to its market.

How tariffs became an energy bargaining tool

Trump's sweeping tariffs, culminating in the April 2025 measures described as Liberation Day tariffs, targeted dozens of countries. Asian economies faced some of the highest rates. The administration says its goals are to reduce the US trade deficit and bring manufacturing jobs back to America.

Asian governments have offered greater purchases of US energy to help avoid or reduce those tariffs. Buying American gas increases US exports and can narrow the gap between what Washington buys from a trading partner and what it sells to that country. For Asian exporters, tariff relief can help protect sales and jobs in industries serving the American market.

Washington has presented expanding fossil fuel exports as part of its economic and trade policy. Agreements increasingly include commitments to buy large amounts of American oil and gas. The administration argues that economic and national security should come first, even when those priorities slow climate action.

The negotiations have developed across several months:

• In 2020, the Federal Energy Regulatory Commission approved the Alaska LNG project, although construction had not begun by September 1, 2025.
• In April 2025, Trump's Liberation Day tariffs intensified pressure on Asian trading partners.
• In May, Vietnam signed an agreement with an American company to develop a gas import hub.
• In June, South Korean officials visited the Alaska LNG project site while discussing cooperation.
• At the August 2025 summit between South Korean President Lee Jae-myung and Trump, Korea agreed to invest $350 billion in the United States and purchase $100 billion in US energy products.

Asian buyers are making different commitments

JERA's contracts give Japan a substantial future supply commitment: up to 5.5 million metric tons each year for 20 years, beginning around 2030. Vietnam's agreement focuses on developing a gas import hub, while its prime minister has called for more LNG imports.

South Korea has discussed cooperation on the $44 billion Alaska project as part of the wider energy relationship. Taiwan's CPC Corp. signed its letter of intent at a ceremony in Taipei attended by Alaska Governor Mike Dunleavy and Taiwan's minister of economic affairs. The letter covers both gas purchases and investment in the project's development.

Thailand has offered to commit to a long term deal for American fuel and has expressed interest in the Alaska pipeline. The Philippines has also shown interest in long term US LNG agreements and the Alaska project. Japan and South Korea continue to discuss possible investments and supply arrangements connected to Alaska.

India is considering removing import taxes on US energy shipments to help narrow its trade surplus with Washington. It has also issued tenders for US LNG, inviting suppliers to offer cargoes. Increasing American energy purchases is viewed as a way to diversify India's supplies and reduce dependence on rivals such as Russia and China.

Signed supply contracts, letters of intent and expressions of interest represent different stages of commitment. JERA has agreed to purchases over a specified period; several other arrangements still involve negotiations over investment, development or future supply.

Why long contracts can slow cleaner energy

Many Asian countries have promised to reduce greenhouse gas emissions and expand renewable electricity. Contracts stretching across decades could make those goals harder to reach if governments continue paying for gas and the infrastructure needed to use it after cleaner alternatives become more attractive.

Indra Overland, head of the Center for Energy Research at the Norwegian Institute of International Affairs, warns that pipelines, import terminals and power plants burning gas are expensive investments that are difficult to replace. Once countries build them, the pressure to keep using them can delay a switch to solar and wind, which are becoming cheaper and faster to deploy.

Overland described the risk of committing to infrastructure that could lose its usefulness as energy technology changes:

Locking into long-term LNG deals could leave countries with outdated infrastructure as the world shifts rapidly toward cleaner energy sources," Overland said. "You're more likely then to get stuck for longer.

A stranded asset is an investment that becomes less useful or less valuable before its owners have recovered their costs. For an LNG importer, that could mean an underused terminal or power plant while money remains tied up in construction and fuel commitments.

LNG burns more cleanly than coal, producing less carbon dioxide and air pollution during combustion. It remains a fossil fuel that contributes to climate change. Methane leaking during extraction and transport can increase its climate impact further.

The Trump administration has rolled back requirements for LNG exporters to monitor and report methane emissions, weakening oversight and accountability. It has also rolled back clean energy initiatives, phased out green subsidies and promoted fossil fuel exports. Researchers warn that those changes could slow innovation, raise consumer prices and weaken international efforts to limit climate change.

Pakistan shows how demand can change

Many LNG contracts contain take-or-pay clauses. These require a buyer to pay for an agreed amount of gas even when it no longer needs that fuel. Such terms can provide certainty for suppliers while leaving importers with bills after demand falls.

Christopher Doleman of the Institute for Energy Economics and Financial Analysis warns that rapid renewable energy growth could leave countries paying for LNG they do not use. The risk is especially relevant when contracts last much longer than the period needed to install new solar generation.

Pakistan has already experienced a version of this problem. Rising LNG prices pushed up electricity costs, encouraging consumers to install rooftop solar panels. As demand for electricity supplied through the existing system fell, Pakistan had to defer LNG shipments and try to resell excess fuel.

Pakistan's experience connects household decisions with national energy contracts. Consumers responding to expensive electricity can reduce their need for power generated from imported gas, while the country still has purchase obligations. Asian governments considering new agreements must weigh that possibility alongside today's expected demand.

The scale of trade promises exceeds likely gas needs

US LNG faces competition from cheaper coal and renewable energy in Asia. Researchers question whether large purchases make economic sense when buyers are also seeking affordable electricity and lower emissions.

The Alaska LNG project faces particularly strong doubts about its economics. For American gas to be competitive in the circumstances described, its price would need to fall to less than half its current level. Tariffs on Chinese steel could make pipelines and terminals more expensive, while delays in gas turbine manufacturing mean new projects may not begin operating until 2032.

A global glut of LNG is pushing prices lower. That makes commitments to long contracts at today's higher prices harder to justify, particularly when buyers could face lower market prices later.

The volumes needed to make a large dent in trade imbalances are also enormous. South Korea would need to import 121 million metric tons of LNG in a year to meaningfully reduce its US trade deficit through gas purchases. That is roughly three times South Korea's LNG imports and 50 percent more than the total the United States exported worldwide last year.

Vietnam would need to import 181 million metric tons annually, more than twice total US exports. Those comparisons show the limits of using LNG purchases alone to address the trade gaps driving tariff negotiations. Energy commitments can contribute to a deal, while the quantities required may far exceed a country's existing gas market.

Alaska offers a direct route, with major costs

The $44 billion Alaska LNG project has become a focal point of US energy cooperation with Asia. It proposes an 800-mile pipeline carrying gas from Alaska's North Slope to a liquefaction plant at Nikiski, where the gas would be cooled for export.

Ships leaving Alaska could reach Asian markets without passing through the Panama Canal. Trump has promoted the project as a way to supply Asia and create American jobs. Taiwan's proposed purchases and investment, together with interest from Japan, South Korea, Thailand and the Philippines, have given the project a prominent role in trade discussions.

Federal Energy Regulatory Commission approval in 2020 has yet to translate into construction. The project still faces questions about whether it can compete with cheaper coal and renewables in Asia, as well as the prospect of higher construction costs from tariffs on Chinese steel. Previous auctions of leases for oil and gas drilling in Alaska have attracted little industry interest.

The environmental concerns extend beyond the export facilities. Plans to open new areas to drilling include parts of the Arctic National Wildlife Refuge, known as ANWR, and the National Petroleum Reserve Alaska, or NPRA. Environmental groups and Indigenous communities oppose drilling because of its effects on wildlife and traditional lands.

Alaska's proposed route gives Asian buyers an alternative shipping connection, but turning that route into a functioning supply chain requires major construction and investment. Commercial viability, environmental opposition and the absence of construction remain central issues for prospective partners.

Energy security also depends on price and reliability

Asian countries can use LNG imports to diversify their energy sources. Their energy security also depends on whether supplies stay reliable and affordable when politics or international markets change.

Overland, the Norwegian Institute of International Affairs energy researcher, warned about relying heavily on American supply:

The US is not a very predictable entity. To rely on energy from there is a risky proposition.

Russia's invasion of Ukraine showed how events far from Asia can disrupt LNG markets. Cargoes originally destined for Asian buyers were redirected to Europe, where customers were willing to pay more. Bangladesh and Sri Lanka were outbid and left without fuel despite having contracts.

Dario Kenner of Zero Carbon Analytics described the connection between European demand and Asian access to gas:

Events in Europe, which can seem very far away, can have an impact on availability and prices in Asia.

Imported gas therefore brings exposure to competition among buyers across the world. A country can build an import terminal and arrange supply, yet still face sudden price increases or difficulty securing cargoes when a richer market needs more fuel.

Greater dependence on US LNG could leave Asian economies exposed to future price shocks and supply disruptions. The immediate benefit of tariff relief must be weighed against the longer responsibility to keep electricity and industrial fuel affordable.

Trade pressure reaches shipping and clean technology

Trump's energy agenda extends beyond LNG contracts. The administration has threatened tariffs, visa restrictions and port fees against countries supporting global agreements to reduce greenhouse gas emissions from shipping.

Scientists and European officials have expressed alarm about pressure on countries to buy US fossil fuels and retreat from clean energy pledges. A climate policy briefing published on August 27 described those concerns. Scientists argue that the world needs to move rapidly away from fossil fuels to avoid the worst effects of climate change.

Tariffs also raise the cost of materials used in clean technology. More expensive steel, aluminum and other inputs make wind turbines, electric vehicles and solar panels costlier to build. Those increases can slow the spread of renewable energy and make national climate targets harder to meet.

The United States depends heavily on imports of many critical minerals needed for clean technology. Trade tensions increase the risk of disruptions to those supply chains, adding uncertainty for companies planning new manufacturing or energy projects.

Some researchers see a possible countereffect: higher construction costs could make American LNG exports less competitive and slow their expansion. Across both fossil fuels and cleaner technologies, however, tariffs raise costs and complicate investment decisions.

Large deals are reshaping alliances

South Korea's August commitments of $350 billion in US investment and $100 billion in energy purchases place LNG discussions within a much broader economic relationship. Similar deals have been struck with Japan and the European Union. Washington has reduced some tariffs in return, although rates remain higher than under previous trade agreements.

These partnerships are intended to strengthen economic and security ties. They also make energy purchases a tool of geopolitical influence: Washington uses exports to reinforce alliances and counterbalance China's influence, while buyers seek trade relief and more varied supplies.

The focus on fossil fuels carries risks beyond the fuel bill. Asian economies could miss investment opportunities in the growing clean energy sector or hold assets that become less useful as demand changes. Economics professor Wayne Gray has warned that US companies could fall behind international competitors in clean energy innovation if current policies continue.

Governments and private companies are not moving in a single direction. Ford and other firms continue developing electric vehicles and renewable energy projects despite reduced government support. Their investment decisions show that cleaner technologies remain part of the economic picture even as trade negotiations promote oil and gas.

Renewables offer another way to meet demand

Southeast Asia currently uses only about 1 percent of its solar and wind potential. Expanding those resources could help meet growing electricity demand, reduce emissions and limit exposure to international fossil fuel price swings.

Solar and wind do not require recurring purchases of imported fuel. They can be deployed quickly and at scale, and their fuel supply is insulated from the global price shocks that affect LNG. They also avoid the same geopolitical risks associated with dependence on imported fossil fuels.

Jon Elkind of the Center on Global Energy Policy stressed the need for a broad mix of technologies to serve rising electricity demand:

All technologies, especially wind, solar, and batteries, are needed to meet growing electricity demand.

Asian governments face a concrete spending choice. Money committed to gas purchases and infrastructure is money that may be less available for renewable generation and other clean energy investment. Contracts can also make it harder to reduce gas use later, even when cleaner electricity becomes more attractive.

The challenge is to secure useful energy supplies without allowing long LNG commitments to crowd out those alternatives. Tariff relief can help exporters now, while decisions about fuel and infrastructure will continue affecting electricity costs, climate goals and energy security for years.

What to Know

• Asian economies are pursuing US LNG purchases and investment to ease pressure from Trump's 2025 tariffs.
• JERA has signed contracts lasting 20 years for up to 5.5 million metric tons annually, starting around 2030.
• South Korea agreed in August to $350 billion in US investment and $100 billion in US energy purchases.
• The proposed $44 billion Alaska LNG project includes an 800-mile pipeline and had not begun construction by September 1, 2025.
• Long contracts and take-or-pay clauses can leave importers paying for gas after demand falls.
• Methane leaks, costly infrastructure and competition for cargoes create climate, financial and security risks.
• Southeast Asia uses only about 1 percent of its solar and wind potential, leaving substantial room for alternatives to imported fuel.